While he noted that many things were working well for them, such as the fast response to community feedback, the implementation of feature releases and an increase in Diggable ads, he said that the company burn rate was "too high."

“We must significantly cut our expenses to achieve profitability in 2011,” said Williams.

“We’ve considered all of the possible options for reduction, from salaries to fixed costs.

“The result is that, in addition to lowering many of our operational costs, I’ve made the decision to downsize our staff from 67 to 42 people,” he said.

While Williams said he wished this move “wasn’t necessary,” he feels it is “the right choice for Digg’s future success as a business.”

The site has been losing readership after it launched a new version of the site. The backlash resulted in many of its users abandoning the site for its rival Reddit.